Mastery 100% Questions Score: 12/14 1 2 3 7 100% 4 5 6 9 11 Average Total Cost 0% 8 10 Fixed and Variable Costs 100% 12 13 14 Concept: Marginal Revenue‚ Marginal Cost‚ and Production Concepts Marginal Revenue‚ Marginal Cost‚ and Production Mastery 100% Questions 1 2 3 7 1.Purely competitive firms increase total revenue by A. B. C. D. increasing production decreasing production increasing price decreasing price Correct
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analysis in a multi product setting * Identify and explain the assumptions and limitations of cost volume profit analysis. INTRODUCTION CVP Analysis is a method of examining the relationship between changes in activity (i.e. output) and changes in total sales revenue‚ expenses and net profit. It is used as a tool for decision making. CIMA’s Official Terminology defined CVP analysis as “the study of the effects on the future profit of changes in fixed cost‚ variable cost‚ sales price‚ quantity and
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completed 75‚000 75‚000 75‚000 Units in ending WIP 12‚000 12‚000 11‚400 Total units accounted for 87‚000 87‚000 86‚400 Cost Information Costs to account for: Direct Conversion Materials Costs Total Costs in beginning WIP $ 0 $ 0 $ 0 Costs added by department 75‚000 372‚000 447‚000 Total costs to account for $75‚000 $372‚000 $447‚000 Cost per equivalent unit $ 1
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According to the relative importance of factors‚ rate each factor i.e. 1 to 7 scales where 1 is least important and 7 is most important. Rate each location i.e. 1 to 10 scales where 1 is very poor and 10 is very good on each factor. Calculate the total score of each location. Prefer the location which has highest location score. Example 1.1: A Car manufacturing unit has considered five alternative locations for their manufacturing plant. Table 1.1 provides the information regarding the factors which
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Summary The case study ‘Hermes Fund Management‚ Total and Premier Oil: the responsibility and accountability of business’ documents that in 2008‚ Hermes Equity Ownership Service (EOS) considers whether they should support Total‚ one of its clients‚ a giant French oil company operates a business in Burma/Myanmar and should they accept Total ’s invitation to visit Burma/Myanmar. David Pitt Watson‚ founder of Hermes EOS has said: "Hermes ’ philosophy is different from most founds. It seeks to create
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retail store that sell music CDs‚ the single measure best reflects the overall level of activity is Number of CDs sold. - In respect to changes in the measure of CDs sold‚ a variable cost is a cost that varies‚ in total‚ in direct proportion while a fixed cost remains unchanged‚ in total‚ regardless of any change. ->Examples of fixed and variable costs in respect to small changes in the measure of selling CDs: Cost | Cost behavior | | Variable | Fixed | The cost of advertising new store
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follows: January February March Total Power Expense $1‚546 $1‚485 $1‚697 Total Revenue Hours 329 316 361 Total Variable Cost per Revenue Hour $4.70 $4.70 $4.70 January February March Total Hourly Personnel Wages Expense $7‚896 $7‚584 $8‚664 Total Revenue Hours 329 316 361 Total Variable Cost per Revenue Hour $24.00 $24.00 $24.00 The total expense for both Power and Hourly Personnel Wages was divided by the total revenue hours. 3.) March (343
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Commercial 123 135 138 86 95 97 30% drop in sales Total revenue hours 329 316 361 292 276 320 Available hours 175 188 167 212 228 208 idle time increased Total hours 536 536 568 536 536 568 Remain constant Revenues: Commercial Sales: Computer use 98‚400 108‚000 110‚400 86‚100 94‚500 96‚600 Revenue under new hourly rate Other 9‚241 9‚184 12‚685 9‚241 9‚184 12‚685 Remain constant Total revenue 190‚041 189‚584 212‚285 177‚741 176‚084
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how it relates to total revenue. Marginal revenue is the change in total revenue from the sale in one additional unit of product (McConnell‚ Bruce‚ Flynn‚ 2012). For example‚ two lamps that sell for six dollars total revenue is twelve dollars. This answer is found by using the formula quantity x price. If an additional lamp was produced‚ the marginal revenue would show if there was any change to the total previously found. To find the marginal revenue one must divide the total revenue by the quantity
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The total fixed costs‚ TFC‚ include premises‚ machinery and equipment needed to construct boats‚ and are £100‚000‚ irrespective of how many boats are produced. Total variable costs (TVC) will increase as output increases. OUTPUT TOTAL FIXED COST TOTAL VARIABLE COST TOTAL COST 1 100 50 150 2 100 80 180 3 100 100 200 4 100 110 210 5 100 150 250 6 100 220 320 7 100 350 450 8 100 640 740 Plotting this gives us Total Cost‚ Total Variable Cost‚ and Total Fixed
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